Democrats: $250K isn't rich

Democrats are increasingly abandoning their biggest talking point on taxes: Families earning more than $250,000 a year are “wealthy” and should pay more.

That figure — $250,000 for a household — has been at the tip of the tongue of so many Democratic candidates and lawmakers in the past few elections that it’s become ingrained in the party’s tax philosophy. But they’ve taken a beating from Republicans and have grown increasingly divided on the issue, since that income level would not only cause tax increases for some small businesses but also hit upper-middle-class suburban voters in swing states.

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So Democrats on Capitol Hill and the White House are settling on an easier sales pitch: Tax the millionaires, believing that public opinion is firmly on their side that the truly rich should pony up more cash as the economy struggles and the national debt continues to grow. The new rhetoric could force a serious rethinking of the Democratic approach toward the Bush-era tax cuts for high earners that they’ve vilified for the past decade, lawmakers said Wednesday.

As they gear up for this fall’s fight over the economy and deficit reduction, Democrats think that “drawing the line at $1 million is the right thing to do,” said Sen. Chuck Schumer (D-N.Y.), a chief advocate of the effort.

“In the eyes of many, it is hard to ask more of households making $250,000 or $300,000 a year,” he said Wednesday. “In large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that is associated with wealth. It also would affect too many small businesses.”

“We need to try to find bipartisan support, and I think there’s a greater likelihood of that if we [tax] income in excess at $1 million,” said Sen. Tom Carper (D-Del.).

The latest sign of this evolution came Wednesday morning, when Senate Majority Leader Harry Reid (D-Nev.) and his top lieutenants modified the president’s jobs plan to include a 5.6 percent surtax on those earning more than $1 million to pay for the $447 billion program. One of the major objections in the president’s initial plan was his proposal to limit deductions for those earning more than $250,000.

Briefing reporters Wednesday, House Minority Whip Steny Hoyer of Maryland acknowledged that “some of our members may like [the new Senate] alternative better.”

But Republicans scoffed at the plan.

“None of that is pro-jobs,” said Sen. Rob Portman (R-Ohio), who is on the 12-member deficit-reduction supercommittee. “Increasing taxes would be bad for economic growth — that doesn’t sounds like a jobs bill to me.”

Democrats say it would add fairness to a skewed Tax Code — and the president has shifted his rhetoric as well.

When he unveiled his deficit-reduction plan last month, President Barack Obama took a similar populist approach, proposing what he called the “Buffett rule” to tax millionaires and billionaires at a higher rate, named after wealthy investor Warren Buffett, who famously complained that his secretary’s tax rate is higher than his. And that came a few months after Senate Democrats on the Budget Committee offered an outline calling for a surtax on that income group.

In a sense, the push for a higher threshold is a sign of Schumer’s growing influence over the Democrats’ political tactics - especially since it was the White House that balked last fall at the New Yorker’s call to target millionaires because of its concerns that billions of dollars in potential new revenue would be lost.